Retail spend predicted to stay subdued

RETAIL spending rose just 0.2 per cent in September, slightly below market expectations, with food retailing, cafes, restaurants and takeaways leading the rise.

Seasonally adjusted retail spending was $ 26.89 billion, up from $ 26.87 billion in August, according to Australian Bureau of Statistics data released yesterday. The result was slightly below the 0.3 per cent rise expected and the Australian dollar was largely unmoved at 72.08 US cents.

BIS Oxford Economics’ chief Australia economist, Sarah Hunter, said the subdued spend was not unexpected.

“Given the ongoing weakness in income growth it’s unsurprising that households have had to somewhat rein in their spending plans, and with wage growth generally still weak, we expect the growth rate of consumer spending to be somewhat subdued over the next 12 to 18 months,” she said.

There was a $ 47 million, or 0.4 per cent, rise in food retail spending in September, as well as a $ 20.7 million, or 0.5 per cent, rise in cafe and restaurant spending.

This was was offset by the reduced amount of cash dropped on clothing, footwear and personal accessories, which was down by $ 24.7 million or 1.2 per cent. Household goods and department stores were relatively unchanged.

Meanwhile for the September quarter, there was a 0.2 per cent rise in seasonally adjusted volume terms.